McDonough School of Business
News Story

Out of Office

By Sona Pai
Photo by Jonathan Timmes

From Dilbert to The Office, the corporate office environment has become a recurring setting everyone loves to hate. It is bland and boring. It is full of fake walls and forced interactions. It is a place you go to because you have to, and you cannot wait to leave. But over the past decade, a new kind of office space has been flipping the script: the coworking space.

Freelancers, remote workers, startups, and even entire teams from large, established companies share space, supplies, technology resources, and, increasingly, expertise, camaraderie, and community. All with people they happen to be working near, but not necessarily with.

“Coworking spaces have baked in all kinds of ways to help people feel like it is not just a place to come and plant yourself and your laptop,” says Michael O’Leary, teaching professor of management and faculty chair of the Undergraduate Program at Georgetown’s McDonough School of Business. “It is a place to come and build relationships, make connections, learn new things, and take advantage of an infrastructure you would not be able to pay for yourself as a solo telecommuter or remote worker.”

Coworking spaces are not a new idea, but they have become more common as the modern professional experience evolves via advances in collaboration technology and the emergence of a thriving economy.

Researchers estimate the number of people using coworking spaces around the world will more than double in the next two years, from 1.74 million to 3.8 million by 2020.

In 2017, one of the world’s largest coworking companies, WeWork, doubled the size of its membership to 200,000 people. Company forecasts indicate membership will double again by the end of 2018, when WeWork’s global footprint will include 400 buildings in 83 cities across 27 countries. WeWork’s projected revenue in 2018 is $2.3 billion.

“WeWork and other coworking organizations have been smart about seeing what they offer as a professional ecosystem and not just a physical space to rent,” says O’Leary. “They are allowing people the flexibility to work effectively from anywhere while also providing a sense of identity, belonging, and collegiality to people who do not go into a typical office.”

Reinventing the Culture of Work

WeWork launched in New York in 2010 with a membership of small startups and freelancers. The company’s mission: “Create a world where people work to make a life, not just a living.”

Today, the global company is the second-largest renter of office space in Manhattan and is on track to become the largest by the end of the year.

WeWork offers various levels of membership, giving members access to private and shared workspaces, conference rooms, printing and office supplies, professional development and networking opportunities, and a global social network they can tap into for new clients, freelancers, advice, and mentorship.

“Our community is really what the business is about,” says Artie Minson (B’92), WeWork’s president and chief financial officer (CFO). “The bigger we get, the more global and stronger our community gets. That is the real differentiating factor, and it is really tough to replicate.”

According to Minson, while WeWork provides the catalyst for connection, its members have created the vibrant community that exists today, building relationships, and even businesses, within the world of WeWork.

“There is a trust factor and a comfort in doing business with people who are part of the same community,” Minson says. “In a lot of our buildings, half our members are doing business with one another. We have accountants, lawyers, public relations firms, and event planners who have moved into WeWorks and built great businesses by being service providers to the rest of the community.”

As the company has grown, Minson and the WeWork team have expanded their offering into products and services that address more than day-to-day office life. WeLive offers furnished, flexible short-term living spaces, and WeMRKT is an online marketplace where members can sell their products. Recently the company expanded into the education market, acquiring the Flatiron School, a coding academy for aspiring tech professionals, and launching WeGrow, an elementary education concept.

WeWork also is becoming a go-to for established corporate clients who want to bring the modern cachet and spirit of a WeWork space into their own working environments. With a product called Powered by We, WeWork brings its approach to workspace design, technology infrastructure, and community programming into clients’ more traditional corporate spaces.

“Larger companies are seeing us as more than a space provider,” says Minson. “They are thinking about culture. If you think about everything that impacts company culture, the space you work in is a major factor.”

Benefits for Entrepreneurs and Employees

Another WeWork offering, WeWork Labs, zeroes in on the needs of entrepreneurs and startups. These spaces function like accelerators or incubators, offering space for entrepreneurs to work alongside other early stage companies, with education, mentoring, and networking opportunities to help them succeed.

In March 2018, Minson helped establish a partnership between WeWork and the McDonough School of Business’s Georgetown Entrepreneurship Initiative to launch the Georgetown Venture Lab within one of its Washington, D.C., locations, WeWork White House. Created by a $1.5 million gift from Ted Leonsis (C’77) and his family, the Georgetown Venture Lab includes space for up to 90 desks for Georgetown alumni entrepreneurs.

Along with access to the global WeWork community, member benefits include alumni and faculty mentorships, entrepreneur-in-residence office hours, and networking events with other Georgetown alumni and the local business community.

Louis Aronne (B’10), co-founder of the wine brand Saturday Session, launched his business out of the Georgetown Venture Lab in June 2018.

“I had worked in community-based coworking spaces before and really liked the energy and community,” Aronne says. “I like the Georgetown Venture Lab for that same reason. You have people who are bound by a common strand other than just working in the same office space. That helps create the foundation of a support network that is so important at the early stage.”

Aronne’s business develops and sells wine that’s lower in alcohol, calories, and sugar than traditional wines — the wine drinker’s version of a light beer for a casual afternoon.

At Georgetown Venture Lab, he has found an encouraging community of entrepreneurs and mentors, along with connections to local retailers and consumers.

“Everyone has some connection that could help someone else,” Aronne says. “Even casual conversations end up being really helpful. When people talk about what they are doing or what they are struggling with, the start of the solution is likely with somebody in the room. It just takes that social gel to make it happen, and the lab creates that.”

Upgrading the Working Parent Experience

As WeWork expands to appeal to more people, smaller coworking companies are crafting spaces and services around targeted audiences.

In 2019, Two Birds, a coworking space that offers licensed, on-site child care, will launch in the Tenleytown neighborhood of Washington, D.C. Two Birds was founded by McDonough alumni Kelsey Lents (MBA’18) and JP Coakley (MBA’18) and inspired by their experiences becoming new parents — Lents gave birth to a son in June 2017, and Coakley’s daughter was born in February 2017 — while attending graduate school.

“We were both having kids and struggled to find child care that aligned with our irregular academic schedules,” says Coakley.

At the same time, Lents and Coakley were realizing that the way they had grown accustomed to working was about to change — drastically.

“We were used to the flexibility and freedom to work at home in a productive environment, where we could leave at will and go meet up with other professionals,” Lents says. “We knew there were other people who are freelancing and self-employed or working from home who have kids, but we realized everyone is just cobbling together solutions to make it work.”

The Two Birds space is specifically designed to create a new dynamic for working parents. It targets one- to two-person businesses and is located on the urban fringe.

The 13,000-square-foot space will have two floors and room for about 100 children and 60 parents. Child care and workspace stay separate — no babies crawling around or toys to trip over — and parents are free to visit their kids throughout the day.

Children at Two Birds might not even realize their parents are in the same building, while parents get the peace of mind of knowing their kids are nearby and well cared for.

“For people who exist in this gray area between staying at home or working from home and working in a corporate office, one of the biggest frustrations is that you feel like you have to either prioritize your parenting life or your professional life,” Lents says. “You should not have to do that. There should be a way to exist where both parts of you are equally important.”

Two Birds currently is accepting families on its waiting list and will open in spring 2019.

Creating Space for More Than Work

That idea of catering to all aspects of a person’s life resonates with a new generation of employees who prioritize a work-life balance. At The Gathering Spot in Atlanta, life beyond work is the emphasis, not an extra.

“We do not view ourselves as a coworking space,” says Gathering Spot co-founder Ryan Wilson (C’12, L’15). “We are a private club that has access to coworking as an amenity.”

Wilson and TK Petersen (B’12) opened The Gathering Spot in 2016. Equal parts private club, social scene, and professional setting, the 25,000-square-foot space caters to people across industries, including corporate executives, entrepreneurs, early stage tech companies, politicians, and people in the film and music industries.

“We saw an opportunity to combine the best elements of private membership clubs and coworking spaces,” Petersen says. “We wanted to elevate the concept to a higher level, with a space that could care for the whole person, including their professional and social lives.”

On a typical day, a member might come in and have breakfast at the full-service restaurant, attend a members-only seminar on tax planning, reserve a video conferencing room for a meeting, join a happy hour that includes an exclusive film screening, and then end the day with a midnight brunch party. The Gathering Spot organizes about 20 members-only events each month, and the programming never repeats.

“We are creating a community where, on any given day, the person to your left or your right is a person you want to meet,” says Wilson.

Membership requires an application and an interview process in which one of the key questions is, “What animates you outside of the office?” Wilson and Petersen curate their membership to include people from different industries, age ranges, and backgrounds. Approximately 60 percent of members are women, who might have been excluded from the private membership clubs that inspired The Gathering Spot.

“We think that is representative of this market and also just the way the world is moving,” Wilson says. “We want more people to have a seat at the table and be not just present, but well-represented in the community.”

The Gathering Spot will launch its second location in 2019, in Washington, D.C., with plans to announce a third location by the end of that year.

Office Space for a New Generation

One word people often use to describe coworking spaces is energy. There is a buzz in the air — an electric charge that comes from connecting people who are all working on different projects, but in the same place. It is exciting, engaging, and a far cry from the drudgery of the dreaded cube farm.

“I think, increasingly, we are seeing a paradigm shift,” says Minson. “In the past, decisions about the workspace were often in the hands of the real estate department or the CFO, who would be interested in getting as much space as possible and paying as little per square foot as possible. Now there is another option that is both meaningfully cheaper on a per employee basis and provides a significantly improved employee experience.”

From community programming to professional development opportunities, workers who join coworking spaces are getting benefits beyond what many employers can offer. On the flip side, employers are saving on real estate costs, getting access to a broader talent base, and reaping the benefits of a culture that engages their employees.

“Companies are taking a step back and looking at the workspace in a whole different way,” Minson says. “They are saying, what really matters is, are my employees happy, and are they excited to come to work every day?”

Published in Georgetown Business magazine, Fall 2018

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